AAPL: BTIG Sees 6M iPhone 5S, 5C First-Weekend Sales

By Tiernan Ray

BTIG Research‘s Walter Piecyk this afternoon opines that Apple‘s (AAPL) sales of the iPhone 5S and iPhone 5C, which go on sale Friday in multiple markets, should be helped by the inclusion this year of China among the initial territories, greatly expanding the potential customer base right out of the chute:

That means that on day one it will be selling into markets with 2 billion wireless subscribers which is more than twice as large as its launch day addressable market in each of the past four years of 670 -770 million wireless subscribers.

Piecyk thinks the company may sell 6 million iPhones this weekend, more than the 5 million sold in the first weekend of availability for the iPhone 5 last year. He notes that with the 5C being a new model, rather than a discounted older model, its sales can help boost Apple’s reported first-weekend sales.

(Free registration required to read BTIG research notes.)

The main issue may be supply for the two models, with reports that there could be shortages:

While we do not take the challenges of execution lightly, if Apple cannot grow its supply to handle this demand like it has for the past two years we have to wonder why CEO Tim Cook bothered to add China into the initial launch in the first place. Nevertheless, we will maintain a supply constrained first weekend estimate of 6.0 million iPhones sold but let’s be honest, that should be easy lifting. We will also maintain our estimate for 30 million iPhones sold in the September until after we have a better idea on supply but we detail the upside potential below.

Piecyk warns about the hazards of trying to guess orders this Friday by looking at the length of lines outside Apple and partner stores:

In past years the line at the 5th Ave Apple store has been populated by groups of buyers that make multi-phone purchases which are then loaded into waiting vans. We can only speculate that these phones final destination are to foreign markets that have not yet launched the product and/or have a very high import tax rate. This year, Apple is launching China at the same time. The inability to Pre-order an iPhone 5S could generate higher traffic for those customers anxious to own the phone on the first day but historically have preferred not to wait in lines. Media reports of very tight supplies of the iPhone 5S could have two different impacts. It could increase the intensity for an early morning line but also discourage others that might not want to wait in a line that leads to a sold out supply. It should be about 60 degrees (Fahrenheit) and dry in NYC on Friday morning and similarly pleasant on the west coast compared to the 20 degree (Fahrenheit) weather for the Verizon CDMA iPhone 4 launch in February 2011.

Piecyk writes that Wall Street is justified in having some trepidation about the fact Apple did not disclose numbers about last week’s pre-orders of the iPhone 5C. “A pattern of disclosure has changed and that is relevant,” he writes.

Still he explains why it may not be that big a concern, including the fact the pre-order type of person would be more likely to want the higher-end 5S than the 5C, and that Apple might not have wanted to provide numbers for the 5C separate from the 5S.

So, analysts downgraded Apple because the phones are too pricey. Yet they're also concerned Apple might not keep up with demand. Have any of them studied economics?

SEPTEMBER 18, 2013 2:56 P.M.

Anonymous wrote:

where the $$$$K is Peter Misek? I like to see the look on his sorry looking face. Oh Peter, where are you? you can't be hiding under the toilet seat all this time..... Oh Peter, where are you??????

SEPTEMBER 18, 2013 3:07 P.M.

Ed wrote:

Who come the Dummies with their picks! F them all

SEPTEMBER 18, 2013 3:08 P.M.

Anonymous wrote:

Peter Misek is feverishly picking his nose because he's busy on the phone with Blackberry...

SEPTEMBER 18, 2013 3:17 P.M.

EricSRox wrote:

Let's see: streaming audio on iRadio now, its awesome. iOS7 downloaded on Gen 3 iPad, no issues along with 10s of millions of other people on day 1. iPhone 5S reviews are great and confirm 2x performance increase with no impact on battery life. 5C is selling boatloads at better margins than would have been the case with iPhone 5. iPad updates on the way (with same performance increase as 5S of course). OS X Mavericks on the way. New MacPro tower on the way. Damn, if this is lack of innovation, I can't wait to see what happens when they pick up the pace. And still the haters go on hating, and the "analysts" keep making up every delusional worst case in the world. How can Samsung possibly answer these challenges? Let me guess: a bigger screen? Wow, SO innovative!

SEPTEMBER 18, 2013 3:47 P.M.

Sales will be great... wrote:

The 64 bit chip is necessary horsepower wise because we're finding more and more reasons to ignore the laptop and desktop. Plus more and more apps will be interpretively something that augments reality... Apart from the next iPad, future devices will be piggybacking on the 64... Google knows this because they've announced Calico...

SEPTEMBER 18, 2013 5:24 P.M.

Jim wrote:

Where's Toni, the " Apple clogged the channels guy"?

SEPTEMBER 18, 2013 7:15 P.M.

Paulo Lin wrote:

@EricSRox - you are delusional, first of all the iPhone 5S and 5C has a CNET rating of 4 stars or "Excellent" where the Samsung Galaxy S4 has a CNET rating "Outstanding", the highest possible rating on CNET. Apple has stolen Android features in iOS7, it's all over the news. The galaxy S4 is an older phone in comparison the the iPhone 5S yet it's loaded with innovative features that the iPhone doesn't have. One simple example, when looking at your screen, it detects your eyes and the screen will not time out as long as you are looking at it. Too bad on the iPhone you have to continuously have to tap the screen so that it doesn't time out unless you want to eat up your battery by extending the time out delay. The Galaxy's battery almost doubles the one in the iPhone. My friends with their iPhones complain the battery life sucks and I laugh when I show them I still have 50% when theirs is dead. Your just a brainwashed Apple fanboy. Wake up, Apple is just going to continue to lose market share and that's a fact of life.

SEPTEMBER 19, 2013 6:18 A.M.

@ Paulo Lin wrote:

This is you and Samsung :-0 • •• ••• C=====8 Me and Apple

Bon Appetite.
(that's French for good appetite. you guys deserve it)

English version: Eat Me Pal!

SEPTEMBER 19, 2013 6:20 A.M.

@ Paulo Lin wrote:

It's bendy over time. Drop your pants. Assume the position.

SEPTEMBER 19, 2013 3:41 P.M.

Samsung CEO wrote:

Ooh. I like. I like. We submit. I bend over for you Apple. Go faster harder deeper. And don't stop.

SEPTEMBER 19, 2013 8:14 P.M.

Paulo Lin wrote:

I presume your a man with a very small brain, frustrated at the fact that I am right. Too bad you don't have better arguments to contradict my posts other than simple minded insults.

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.